Joint-Venture Plan in Virginia Allies Medical Society with United HealthCare

The 6,600-member Medical Society of Virginia has been searching for a managed care organization to work with for about a year. The society never considered a partnership with United HealthCare Corp. of Minneapolis. But in a strange turn of events, the two are forming a joint venture to develop a statewide managed care plan in Virginia.

Originally the society, which has about one-third primary care physicians, selected PHP Inc., of Greensboro, N.C., out of a field of 15 potential partners (United HealthCare was not on the list). Soon after PHP was picked, its management decided it wanted to sell the company. United HealthCare, which had managed PHP's business for years without having any ownership, was interested in buying.

The society decided to talk directly with United HealthCare and concluded that the company had a similar operating philosophy. Says the society's HMO committee chairman, thoracic surgeon C. Gregory Lockhart: "United HealthCare's emphasis on patient-directed care and doctor-patient relationships is why we approached them and formed a partnership."

The flagship product will be an open-access HMO, which officials expect will be available sometime in 1996. The decision to start other managed care plans will be driven by the marketplace, Lockhart says.

The joint venture will be United HealthCare's first HMO in Virginia. The company serves about 190,000 Virginians through indemnity plans that it acquired through its $1.65 billion purchase of MetraHealth.

Johns Hopkins Adds Affiliations

Rather than rest on their reputation, the medical centers and health system affiliated with Johns Hopkins University in Baltimore are aggressively signing deals to expand their primary care and specialty networks in Maryland, three surrounding states and the District of Columbia. "More than a year ago, Johns Hopkins decided it needed to develop a delivery system in parts of five states over the next several years," says Michele Deverich, vice president for network development at Johns Hopkins HealthCare.

JHHC, a joint venture between Johns Hopkins University School of Medicine and Johns Hopkins Health System, recently agreed to work with Humana Inc. to form physician networks throughout Maryland. As part of the deal, Johns Hopkins officials insisted that Humana use Johns Hopkins University as its sole academic center and employ nine central Maryland hospitals that Johns Hopkins works with through the Atlantic Health Alliance.

Together, the organizations will form specialty physician networks throughout Maryland. Johns Hopkins already has an eye network, a pediatric network and a primary care network that has many internists and a few family doctors. Humana's enrollees will be able to receive care through Johns Hopkins' networks and its hospitals.

On its own or through partnerships, Johns Hopkins HealthCare plans to expand its existing networks and develop new ones that would cover Maryland, Delaware, Washington, D.C., eight northern counties of Virginia and southern Pennsylvania, excluding Philadelphia.

Foundation Gives Grant To Study Medicaid Services

The Robert Wood Johnson Foundation has opened its wallet once more. This time the philanthropic organization has established a $21 million initiative to identify the best models for delivering managed care services to state Medicaid recipients.

The Health Care Financing Administration has granted waivers to a number of states to permit them to expand Medicaid managed care demonstration projects. But, says foundation President Steven A. Schroeder, M.D., "States have little experience in competitive purchasing for special needs populations, and this move into managed care means that the health care for millions of Americans hangs in the balance."

To address this concern, the foundation has started a program called "Strengthening the Safety Net: The Medicaid Managed Care Program." The initiative, which will be conducted by the nonpartisan group Center for Health Care Strategies, will award two grants and a technical assistance component.

Meanwhile, the Centers for Disease Control and Prevention has contracted with the Group Health Association of America/American Managed Care and Review Association to study, over five years, the ways in which managed care organizations can use preventive care to address public health problems. A consortium of health plans will be involved in the work.

The project also involves educating public health agencies and women's health organizations on managed care's preventive care approaches. GHAA/AMCRA will be paid about $4 million.

PPM Industry Continues its Consolidation

Physician practice management companies, which purchase practice assets and shoulder administrative duties for physicians, are experiencing growing pains like other segments of the health care industry. The largest PPM, Medpartners/Mullikin, formed from the merger between Medpartners and Mullikin Medical Enterprises in August, recently announced its desire to acquire Pacific Physician Services of Redlands, Calif.

The deal, valued at $332 million, would expand Medpartners/Mullikin's presence in the Southeast and Pacific Northwest. If the merger is approved by regulatory officials and the shareholders of both companies, the resulting entity will cover roughly 680,000 prepaid members.

Chart: In search of the ideal practice setting

More primary care physicians would choose to work as HMO or clinic employees than in solo practices, according to a recent survey of nearly 33,000 doctors. Groups and single-specialty networks are the favorite practice arrangements, the survey revealed. And when it comes to geography, warmer climes are favored over cooler ones.